June 2011

New Law Shields Employers with Compliant Drug-Testing Policy

Originally posted in the Arizona Employment Law Letter, June 2011
By Dinita James

In our April 2011 issue, we reported on House Bill (HB) 2541, which was designed to clear up some of the ambiguity created for employers by the passage in November 2010 of the Arizona Medical Marijuana Act (AMMA). Our prediction that the legislation would pass proved correct, and Arizona Governor Jan Brewer signed the bill into law on April 29, 2011.


The AMMA prohibits you from taking adverse action against an employee or applicant based on that person's status as a state-permitted user of medical marijuana or his positive drug test for marijuana metabolites unless the person used, possessed, or was impaired by marijuana in the workplace or during the hours of employment.

The AMMA did not, however, provide employers with any guidance on how to determine whether a person is "impaired." HB 2541 is the Arizona Legislature's attempt to provide you with guidance on that issue and several others.

Only Certain Employers Covered

HB 2541 is an amendment to Arizona's existing drug-testing law, originally enacted in 1994 as the Drug Testing of Employees Act. The Act offers private employers a shield from liability if they adopt a drug- testing policy that complies with its provisions and choose to drug test applicants or employees. Among the provisions of the Act are mandates that the employer have a written policy and pay all costs of testing for existing employees (but not applicants). A compliant drug-testing policy also must be applied uniformly to all compensated employees, including corporate officers, directors, and supervisors.

Because HB 2541 primarily amends the Drug Testing of Employees Act, the protections it provides are applicable only to employers that have drug- testing policies that are compliant with the state law.

Good-faith Actions Protected

A key protection of the Drug Testing of Employees Act is a prohibition on lawsuits against employers that take employment actions in good faith based on a positive drug test. HB 2541 adds to those protections actions taken based on a good-faith belief that an employee used or possessed any illegal drug or was impaired while on the employer's premises or during the hours of employment.

The new law contains an extensive definition of "good faith." The good- faith belief that the employee used, possessed, or was impaired at work or during work hours can be based on:
  • observations of the employee's conduct, behavior, or appearance;
  • information reported by a person who is believed to be reliable that she witnessed the use or possession of drugs or drug paraphernalia at work;
  • written, electronic, or oral statements;
  • lawful video surveillance;
  • records of government agencies, law enforcement agencies, or courts;
  • results of a test for the use of alcohol or drugs; or
  • any other information reasonably believed to be reliable or accurate.
HB 2541 also contains an extensive definition of the symptoms of impairment that you can consider, including effects on speech, walking, standing, physical dexterity, agility, coordination, actions, movement, and demeanor. You may also consider appearance, clothing, and odor. Other symptoms recognized as potentially valid indicia of impairment are an employee's irrational or unusual behavior; negligence or carelessness in operating equipment or machinery; disregard for his own safety or the safety of others; involvement in an accident that results in serious damage to equipment, machinery, or property; disruption of a production or manufacturing process; or any injury to himself or others.

There also is a catchall for "other symptoms" that cause a reasonable suspicion of the use of drugs or alcohol. The clear intent of the legislation is to give employers wide discretion in forming a good-faith belief that an employee may be impaired.

Exclusion From Safety-sensitive Positions

Another feature of HB 2541 is a shield against employer liability for actions to exclude an employee from performing a safety-sensitive position based on a good-faith belief that he has engaged in the "current use" of any drug that could cause an impairment or decrease or lessen his job performance. This provision applies whether the drug is legal, prescribed by a physician, or otherwise. The employer's belief about the impairing effects of the drug can be based on a wide range of sources, including warning labels, information from a physician or pharmacist, or information from other sources it believes in good faith to be reliable, such as the Internet.

HB 2541 defines "current use" of any drug to mean "use that has occurred recently enough to justify an employer's reasonable belief that involvement with drugs is ongoing." The clear intent of that definition is to cover the legal use of medical marijuana and to allow employers to exclude state-licensed medical marijuana users from safety-sensitive positions.

The definition of what is a safety-sensitive position is likewise very broad, including:
  • operating a motor vehicle, other vehicle, equipment, machinery, or power tools;
  • repairing or maintaining equipment or machinery the malfunction or disruption of which could result in injury or property damage;
  • working on the residential or commercial premises of a customer, supplier, or vendor;
  • working in preparation or handling of food or medicine; or
  • working in any occupation regulated by Title 32 of the Arizona Revised Statutes. (Title 32 is extremely broad, covering just about every occupation for which a state license is required, including all of the medical professions; barbers, cosmetologists, aestheticians, and nail technicians; certified public accountants; collection agency employees; contractors; funeral directors and embalmers; architects, engineers, geologists, landscape architects, and surveyors; real estate brokers and agents; veterinarians and veterinarian technicians; pest control applicators; private investigators; security guards; polygraph examiners; and massage therapists.)
 If an employer with a compliant drug-testing policy identifies a position as safety-sensitive, then it can exclude from that position anyone who, based on the employer's good-faith belief, is engaged in current use of any drug, including medical marijuana. Your actions to exclude an employee from safety-sensitive positions can include reassigning him to another position or placing him on paid or unpaid leave.

While this provision isn't a model of clarity, it appears to be intended to permit employers that have a compliant drug-testing policy to exclude state-licensed medical marijuana users from safety-sensitive positions by taking actions short of termination.

Will HB 2541 Survive Court Challenges?

Because the AMMA was adopted by the voters, it's subject to Proposition 105, a citizens' initiative that amended the Arizona Constitution in 1998 to limit the legislature's ability to alter voter-approved initiatives and referenda. Proposition 105 prohibits the legislature from repealing a voter initiative or amending it unless the amendment both furthers the purposes of the voter-approved measure and is adopted by three-fourths of the members of each house of the legislature.

It appears likely that the legislature's power to enact HB 2541 will be challenged in the courts under the theory that the legislation conflicts with the voter-adopted AMMA. The AMMA expressly prohibits adverse employment actions against state-permitted medical marijuana users as long as they don't come to work impaired or use or possess marijuana on the employer's premises. HB 2541, on the other hand, purports to allow employers that have adopted a valid drug-testing policy to exclude workers who are currently and legally using medical marijuana from safety-sensitive positions, including putting them on unpaid leave. It's hard to argue that isn't a direct conflict with the voter-approved law.

While the bill passed both the Arizona House and Senate with higher margins than the three-fourths required by Proposition 105, opponents likely will argue that HB 2541 is contrary to the purpose of the AMMA. It appears that the Arizona Senate may have anticipated a legal challenge to HB 2541, because it added a severability provision during its consideration of the bill. The severability provision allows for the remainder of the law to remain in effect if certain provisions are struck down by the courts.

Bottom Line

If HB 2541 survives legal challenge, it will be an important tool for employers trying to accommodate medical marijuana in the workplace while maintaining a safe and productive work environment. In these early days, however, employers are left with one more decision to make in the face of uncertainty. If you don't already have a drug-testing policy, you'll need to decide whether the protections available under HB 2541 are worth the costs, of both operating a drug-testing program and facing the uncertainty about whether the courts will uphold all of its protections.